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Dover Expands in Global Retail Fueling with Wayne Buyout
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Dover Corporation (DOV - Free Report) has completed the acquisition of Wayne Fueling Systems Ltd. from Riverstone Holdings LLC for $780 million in cash. In addition to augmenting Dover’s portfolio, the transaction provides significant margin enhancement opportunities.
Headquartered in Austin, TX, Wayne is a global provider of fuel dispensing, payment, systems and aftermarket services for retail and commercial fuel stations with manufacturing operations across Sweden, China and Brazil. Backed by its advanced payment and systems solutions, Wayne is well positioned to capitalize on the emerging conversion of U.S.-based fuel retailers to Europay, MasterCard and Visa ("EMV") chip security technology. Through its wide network of distributors and service partners, Wayne sells its products in over 140 countries and is projected to generate revenues of approximately $550 million in 2016.
Wayne's product line is a synergistic fit with Dover’s OPW and Tokheim, particularly its U.S. dispenser, payment and systems businesses. Tokheim and OPW have been leaders in the retail fueling industry for more than a century. Following the acquisition, the combined business will offer an end-to-end solution that will benefit customers in the growing global retail fueling market. The transaction will enable Dover to fully capitalize on the high-growth EMV upgrade cycle underway in the U.S. Combination of Wayne's innovative product offerings with OPW and Tokheim will enable Dover to realize annualized retail fueling revenue of $1.4 billion.
To address the U.K. Competition and Markets Authority's ("CMA") concerns regarding the competitive overlap in U.K., Dover will divest Wayne's small distribution business in U.K in the near future.
The acquisition will have a negative impact of 7 cents per share in the fourth quarter of 2016, which includes Wayne’s operating earnings offset by deal costs, normal purchase accounting costs, as well as synergy related costs. However, in 2017 the buyout will be accretive to earnings, including costs to achieve synergies and normal purchase accounting amortization costs.
Dover intends to remain focused on expanding its business in key markets that offer significant growth potential and lead to organic and inorganic growth at all segments. Moreover, the company strives to innovate its products as per customer needs in order to gain market share. However, unstable oil prices and foreign exchange volatility remain concerns for Dover.
A look at Dover's year-to-date price performance reveals that barring few ups and downs, it has performed in line with the broader Zacks Categorized Machinery - General Industrial market. This reflects the company's focus on segment margin expansion through productivity initiatives, including supply chain activities, strategic pricing and portfolio shaping. Further, investors appreciate Dover’s long tradition of making successful acquisitions in diverse end markets.
Zacks Rank & Key Picks
Dover currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Applied Industrial Technologies, Inc. (AIT - Free Report) , Broadwind Energy, Inc. (BWEN - Free Report) and The Middleby Corporation (MIDD - Free Report) .
The Zacks Consensus Estimate for Applied Industrial Technologies for fiscal 2017 depicts a year-over-year growth of 3%. The company has delivered an average positive earnings surprise of 4.93% in the last four quarters and carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Broadwind Energy, which also carries a Zacks Rank #2 (Buy), has a projected growth of 103.85% for fiscal 2016.
Middleby Corporation, a Zacks Rank #2 stock, has delivered a positive average earnings surprise of 15.93% in the last four quarters. The Zacks Consensus Estimate for fiscal 2016 is projected to grow 26.37% year over year.
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Dover Expands in Global Retail Fueling with Wayne Buyout
Dover Corporation (DOV - Free Report) has completed the acquisition of Wayne Fueling Systems Ltd. from Riverstone Holdings LLC for $780 million in cash. In addition to augmenting Dover’s portfolio, the transaction provides significant margin enhancement opportunities.
Headquartered in Austin, TX, Wayne is a global provider of fuel dispensing, payment, systems and aftermarket services for retail and commercial fuel stations with manufacturing operations across Sweden, China and Brazil. Backed by its advanced payment and systems solutions, Wayne is well positioned to capitalize on the emerging conversion of U.S.-based fuel retailers to Europay, MasterCard and Visa ("EMV") chip security technology. Through its wide network of distributors and service partners, Wayne sells its products in over 140 countries and is projected to generate revenues of approximately $550 million in 2016.
Wayne's product line is a synergistic fit with Dover’s OPW and Tokheim, particularly its U.S. dispenser, payment and systems businesses. Tokheim and OPW have been leaders in the retail fueling industry for more than a century. Following the acquisition, the combined business will offer an end-to-end solution that will benefit customers in the growing global retail fueling market. The transaction will enable Dover to fully capitalize on the high-growth EMV upgrade cycle underway in the U.S. Combination of Wayne's innovative product offerings with OPW and Tokheim will enable Dover to realize annualized retail fueling revenue of $1.4 billion.
To address the U.K. Competition and Markets Authority's ("CMA") concerns regarding the competitive overlap in U.K., Dover will divest Wayne's small distribution business in U.K in the near future.
The acquisition will have a negative impact of 7 cents per share in the fourth quarter of 2016, which includes Wayne’s operating earnings offset by deal costs, normal purchase accounting costs, as well as synergy related costs. However, in 2017 the buyout will be accretive to earnings, including costs to achieve synergies and normal purchase accounting amortization costs.
DOVER CORP Price
DOVER CORP Price | DOVER CORP Quote
Dover intends to remain focused on expanding its business in key markets that offer significant growth potential and lead to organic and inorganic growth at all segments. Moreover, the company strives to innovate its products as per customer needs in order to gain market share. However, unstable oil prices and foreign exchange volatility remain concerns for Dover.
A look at Dover's year-to-date price performance reveals that barring few ups and downs, it has performed in line with the broader Zacks Categorized Machinery - General Industrial market. This reflects the company's focus on segment margin expansion through productivity initiatives, including supply chain activities, strategic pricing and portfolio shaping. Further, investors appreciate Dover’s long tradition of making successful acquisitions in diverse end markets.
Zacks Rank & Key Picks
Dover currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Applied Industrial Technologies, Inc. (AIT - Free Report) , Broadwind Energy, Inc. (BWEN - Free Report) and The Middleby Corporation (MIDD - Free Report) .
The Zacks Consensus Estimate for Applied Industrial Technologies for fiscal 2017 depicts a year-over-year growth of 3%. The company has delivered an average positive earnings surprise of 4.93% in the last four quarters and carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Broadwind Energy, which also carries a Zacks Rank #2 (Buy), has a projected growth of 103.85% for fiscal 2016.
Middleby Corporation, a Zacks Rank #2 stock, has delivered a positive average earnings surprise of 15.93% in the last four quarters. The Zacks Consensus Estimate for fiscal 2016 is projected to grow 26.37% year over year.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>